Binance allegedly demanded more money from FTX: new details of the bourse’s bankruptcy
There has been a new Twitter dispute between Binance CEO Changpen Zhao and former FTX chief Sam Bankman-Fried. It revealed some more interesting details about the relationship between the two exchanges amid the FTX liquidity crisis in early November, which may turn out to be true. Recall, then Binance announced the possibility of buying the competitor’s platform, but almost a day later declined. The decision was attributed to problems with FTX’s financial health, as well as regulatory attention to the situation with the trading platform. We will tell you more about what is happening.
It should be noted that this is not the first time that a Binance executive has commented on Sam Bankman-Fried’s actions. In particular, in mid-November he compared the FTX founder to a psychopath. The statement was in response to Sam’s tweet that Chanpen had allegedly won. Apparently, Zhao completely misunderstood the message of such a remark.
This week, Chanpen took it upon himself to shatter the myths surrounding the collapse of FTX that exist today. At the time, he claimed that his tweet about the Binance exchange selling FTT stock had not destroyed the company. In fact, the reason for the collapse was a tweet by Alameda Research executive Caroline Allison, who offered to buy all the tokens at a lower rate, thus pre-leasing her own level of collateral liquidation.
Former Alameda Research executive Caroline Ellison
Be that as it may, it didn’t end there. And prominent members of the blockchain industry have once again taken to debating on Twitter.
What happened between Binance and FTX?
According to Cointelegraph’s sources, it all started with Zhao publishing another track on Twitter about the FTX situation. In it, he among other things called Sam a scammer, something that has happened in public before. The Binance founder also noted that his exchange sold its stake in FTX in 2021, as Chanpen did not like the strange relationship between FTX and the trading firm Alameda.
The latter was also founded by Sam Bankman-Fried and was also used for insider trading. There has also been active movement of client funds between Alameda and FTX, used to briefly solve the financial problems of both companies.
Sam’s tweet
In response to the unflattering comments, Zhao Bankman-Fried accused Binance of publicly suggesting implausible facts about their alleged deal in early November. According to him, Binance allegedly threatened to pull out of the agreement at the last minute, demanding an additional $75 million from Sam’s team.
However, none of that matters anymore – with this statement Zhao summed up the controversy. Here’s his quote to that effect.
Sam, it’s not that it’s that important right now. You couldn’t force us to sell our stake in the company either, even if you really wanted to. We also had the right to veto any attempts by you to raise new capital. But this was not our battle or competition, no one came out of the situation a winner.
Chanpen’s tweet
Be that as it may, the Chanpen exchange now has one less major competitor, and has itself gained a serious cause for growing its own reputation. However, the crypto market as a whole has really suffered from what happened, and the long-term consequences of the FTX collapse could be a serious problem.
Another conflict could flare up between Coinbase, the largest US cryptocurrency exchange, and USDT Tether, the issuer of the USDT stablocoin. The day before, Coinbase advised its customers to convert USDT to USDC, a stabelcoin from Circle, which Coinbase co-founded.
Exchange officials argue that amid recent market volatility, USDC may be a much safer option for investors than USDT. Here is the relevant quote cited by Cointelegraph.
We believe that USD Coin (USDC) is a stablecoin with great credibility and a high reputation. That’s why switching to it will be more convenient: we remove fees when converting USDT to USDC.
Announcement on Coinbase blog
Stablecoins used to be a key gateway for capital inflows to the industry, but now they have become the main source of liquidity for the market. Competition between these projects is therefore growing, and it’s not surprising that Coinbase wants to keep the community informed of what’s happening.
We believe that to share the details of events in November and over the past few years in general, Sam Bankman-Fried will already be on his way through the proceedings. For now, he should clearly focus on the upcoming US Congress hearings rather than looking for an excuse to once again attack the Binance executive. At the very least, such actions make very little sense.
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